Grant Quasha is the CEO of Eco Material, a leading producer and supplier of cement products that use selective cementitious materials (SCM) and other alternative sources of materials. The company has made significant investments in recent years to expand its supply of SCM beyond the traditional sources of waste materials produced by coal-fired power plants. Quasha spoke to ENR about the current and future prospects for alternative materials in the cement supply chain. This interview has been edited and condensed for clarity.
ENR: Eco Material is a company that covers a lot of companies in the cement industry, and people may not realize how strong you are in the cement alternative materials market.
Quash: The name Eco Material is only a few years old, but we are probably a dozen companies in total that have been operating since the 70s in the replacement of cement material. Two and a half years ago, we merged Boral Resources with Green Cement, the country’s largest supplier of fly ash and SCM, now the largest supplier of near-zero carbon cement.
In recent years we have expanded our business, not in addition to, but in combination with, our business of introducing fly ash produced into the preparations market. But because the supply of this material will become less available over time, we have invested more in newer SCMs: harvested fly ash, bottom ash, beneficiated bottom ash, natural pozzolans, and green cement binders. We are the leaders in cement and concrete decarbonisation.
Do you see a push for sustainability and green building driving your business, or is it changing regulations?
Our business has been strong for many years, but frankly the main selling point of our material was cost and performance characteristics. Because [state departments of transportation] specifying fly ash and other SCM in projects is due to performance characteristics such as reduced alkali silica reaction [compared to traditional concrete]. But in the last five years, the last two years really, another increasingly important element as a selling point is this green angle. Our products are not only a cost-effective way to improve performance, they are a cost-effective way to reduce carbon. Therefore, for this “green premium”, customers would prefer to use our product. And as regulations change, more advanced states and Europe may increasingly mandate their use.
How has your supply chain evolved, given the changing energy mix in the US and the shrinking of coal-fired power plants?
So 10 to 15 years ago, there was an oversupply of fly ash in the market, probably 50 million tons of fly ash produced. Today that figure is less than half. Also, of these tonnages, what was once a majority and now a minority are outside the specifications of the ASTM specification. The amount of spec material produced from coal plants today is probably less than half what it was 10 or 15 years ago. Today probably everything [in the ash supply that is] on-spec is used in the production of concrete to specifications. And a lot of use [in construction] was established in this range 10 to 15 years ago.
So how does Eco Material continue to meet demand despite declining supply?
Right now we have zero to 30% off compared to regular Portland cement. But ash is produced where energy is produced, not where it is needed for construction. And it is a low value material to ship and store. We have invested heavily in storage and move it where needed.
We’ve seen a real shift in the overall market. In many [regional] markets, they don’t have much material left. In California, there is no more coal-fired power generation in the state; everything that comes in has to be transported from out of state. We transport tons there per year.
That’s why we’ve invested so much in new materials, and by collecting beneficial ashes from the landfill we can dig them up, benefit them and put them to use.
In our business, we sell virtually all fly ash to the specifications we obtain. We need to invest to get it out of landfills. And when we benefit the ash from the bottom [another coal-fired generation byproduct] historically it has a lower value. We have been pioneers in this. So not only have we taken all the traditional supply available, but we have to pull from various other sources, and all of this requires technical expertise. We are very well positioned.
Let’s talk about the logistical puzzle of getting the materials where they need to be. How is this changing?
We sell a low-value product, at $80 a ton. There is a power plant in southern Illinois; before working with them, they dumped 3 tons a year of coal ash, gypsum, etc. We use all of that, and a significant portion of it goes on trains in California. It’s a lot of logistics to fully utilize this material.
We must be a customer-centric business. We have our own ready mix concrete suppliers (we don’t pour, we mix) and over 50 utility partners. We are about half of the country’s market. Some of our competitors say we supply everyone, but we don’t offer them any deals, but that’s not true. You have to make the pie big enough for everyone to benefit from. The best way to do that, in our business of such scale, is to scale up.
We make investments not only in our own physical logistics, but in our software and analysis, we have a significant investment in our logistics modeling and optimization, thousands of supply routes from one place to another, finding the optimal solution to avoid the elimination of public service partners. and transfer the maximum to customers.
Over time, as we invest more in harvesting and manufacturing operations, the problem is less. But the tail doesn’t wag the dog: plants don’t run to produce ash, they run to produce energy, so there can be problems.
So how do you structure these relationships with public services to meet demand?
Our contracts with public services are divided into two blocks. One is that because they produce ash on a plant-by-plant basis, a plant will contract with us for five years and we sell [it to the construction market], after our costs, we pay a little gratuity to the company. This is the traditional model.
But more and more now we are looking to non-traditional supplies, and that requires investment. You can’t point to a pile of ashes and dig into it when it’s been sitting for decades. You need a specially designed facility to extract it, dry it, filter it, and see if it’s within spec. This often requires additional technology and work. We typically co-invest with the utility in the capital required for this. Once we’re up and running, it looks more traditional, works when we think it should, designed specifically to produce ash on demand.
Right now we sell between 6 and 7 million tons of ash per year from utilities. We have nine projects under development that will provide 4 million tons per year of non-traditional ash, or SCM. Ten years ago that was 0% of the market, 5 years ago it was 2% of the market, so it’s going to increase dramatically.
Do you see any big changes from states or federal entities requiring greater use of SCMs in their projects?
Frankly, we haven’t seen any major increases in state or federal requirements. California did this years ago, setting a 2030 schedule for a significant reduction in Portland cement and clinker. New York State and [the U.S. General Services Administration] they have longer hours.
But it does give us a road map to where we are going tomorrow. Not only are we treading water with the current supply of SCM, but we can increase it dramatically. We are in an industry where traditional demand remains strong, but due to government action, demand should double again in the next 5 to 10 years.
With the traditional offer [of ash and other SCMs] decreasing, we have a great opportunity to meet this challenge. And we also think in the longer term: we make good profits and in recent years we have invested all this and a little more in the future of the business.
What about updating the specs for these new materials? ASTM has said they are considering a performance-based standard for SCMs.
With ASTM, it’s happening slowly, because standards move slowly, as they should. We [as an industry] we’re building critical infrastructure here and we need to make sure it works as expected. But I think there’s a broad shift that needs to happen from broad specifications to performance-based specifications. There are certainly DOTs that are more progressive on this. I can see that happening, but it could happen a little faster.
We’ve seen a lot of success in the new products we’ve brought online. In Texas, the largest concrete market, we are working with the state DOT to get approval for non-traditional materials, and it could work very well with that market. Should we do more? I think so. We have people in some of our trade groups on various committees who seem interested.
Speaking of these kinds of successes, are there any recent business expansions or newer products you’d like to highlight?
One of the highlights for us is Texas, and in the central region, we’ve been bringing in a lot of new material: beneficiated fly ash, bottom ash mix, agro pozzolana, all blessed by TxDOT and going very well. Additionally, in Texas, we have expanded our operations in Jewitt, Texas. We have nearly doubled production capacity from 100,000 to 200,000 tons per year in PozzoSlag, a pozzolanic material that outperforms grade 120 slag in some characteristics. We’ve invested heavily in this and have had it up and running with the new expansion for a few months now.
